Tracy is thinking about buying 100 shares of a stock selling for $15 per share. The stock pays no dividends. Her broker says that the stock will be worth $20 per share in 2 years. What is the annual rate of return on this investment?
Tracy is thinking about buying 100 shares of a stock selling for $15 per share. The stock pays no dividends. Her broker says that the stock will be worth $20 per share in 2 years. What is the annual rate of return on this investment?
Assume that you instead invest the money ($15000) at an annual rate r, then after 2 years this must be worth $20000 to be an equivalent investment, and r is the annual rate of return on the investment.